January 30, 2018 / 10:52 PM / 23 days ago

EMERGING MARKETS-LatAm currencies mostly lower ahead of Fed policy statement

 (Updates prices, adds GDP news from Brazil, Mexico and Peru)
    By Bruno Federowski
    SAO PAULO, Jan 30 (Reuters) - Latin American currencies
mostly weakened on Tuesday ahead of a Federal Reserve policy
meeting this week that could bolster expectations of higher U.S.
interest rates going forward.
    The Fed will publish its policy statement on Wednesday
following a two-day meeting. Some economists expect it to raise
its economic assessment, which would strengthen expectations of 
the U.S. central bank raising interest rates four times this
year.
    Higher U.S. rates could weigh on demand for emerging market
assets, which typically offer higher yields.
    Traders also avoided risky assets ahead of U.S. President
Donald Trump's first State of the Union address later on
Tuesday.
    "Trade, immigration, and infrastructure are the most highly
anticipated areas of focus. Foreign policy will also be closely
scrutinized as market participants look to comments on North
Korea, Iran, and potentially Russia," analysts at Scotiabank
wrote in a client note.
    Currencies from Brazil, Mexico and Colombia
 weakened between 0.08 and 0.83 percent.
    Stocks fell in the region in the wake of the risk-aversion,
with MSCI's Latin American index down 0.78
percent.
    In Brazil, Finance Minister Henrique Meirelles said economic
reforms, reduction of the state's presence in the economy and
higher productivity may boost the country's growth rate to
between 3.5 percent and 4 percent.
    Mexico's economy, meanwhile, grew around 1.0 percent in
seasonally adjusted terms in the fourth quarter, according to
preliminary government data released on Tuesday. The uptick
surpassed an earlier Reuters poll that forecast an expansion of
0.6 percent. 
    In Peru, the economy likely grew 2.5 percent in 2017,
Finance Minister Claudia Cooper told local radio on Tuesday,
hurt by weak expansion in investment and internal demand.


    Key Latin American stock indexes and currencies at 2152 GMT:
   
    
 Stock indexes            Latest      Daily pct    YTD pct
                                         change     change
 MSCI Emerging Markets      1,247.63       -1.6        7.7
                                                 
 MSCI LatAm                 3,172.01      -0.78      12.16
                                                 
 Brazil Bovespa            84,482.46      -0.25      10.58
 Mexico IPC                50,382.86       -0.5       2.08
 Chile IPSA                 5,859.61      -0.35       5.30
 Chile IGPA                29,422.21      -0.33       5.15
 Argentina MerVal          34,241.26      -1.57      13.89
                                                 
 Colombia IGBC             12,265.46      -0.99       7.87
 Venezuela IBC              3,836.83       2.03     203.75
                                                          
 Currencies                   Latest  Daily pct    YTD pct
                                         change     change
 Brazil real                  3.1811      -0.08       4.16
 Mexico peso                 18.7805      -0.83       4.89
 Chile peso                    606.6       0.01       1.33
 Colombia peso              2,851.35      -0.54       4.58
 Peru sol                      3.216       0.00       0.65
 Argentina peso              19.6300      -0.20      -5.25
 (interbank)                                     
 Argentina peso                19.99       0.20      -3.80
 (parallel)                                      
 
 (Reporting by Bruno Federowski; editing by Chizu Nomiyama and
Rosalba O'Brien)
  
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